U-Haul 2016 Annual Report Download - page 81

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AMERCO AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
F-25
A reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the
period are as follows:
Unrecognized Tax Benefits
March 31,
2016
2015
(In thousands)
Unrecognized tax benefits beginning balance
$
19,929
$
16,850
Additions based on tax positions related to the current year
4,313
3,695
Reductions for tax positions of prior years
(327)
(616)
Settlements
(3)
–
Unrecognized tax benefits ending balance
$
23,912
$
19,929
We recognize interest related to unrecognized tax benefits as interest expense, and penalties as
operating expenses. At March 31, 2015, the amount of interest and penalties accrued on unrecognized
tax benefits was $5.2 million, net of tax. During the current year we recorded expense from interest and
penalties in the amount of $0.7 million, net of tax. At March 31, 2016, the amount of interest and penalties
accrued on unrecognized tax benefits was $5.9 million, net of tax.
We file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions.
With some exceptions, we are no longer subject to audit for years prior to the fiscal year ended March 31,
2013. No provision was made for U.S. taxes payable on undistributed foreign earnings since these
amounts are permanently reinvested; the amount of this unrecognized deferred tax liability is not practical
to determine at this time.
Note 14. Employee Benefit Plans
Profit Sharing Plans
We provide tax-qualified profit sharing retirement plans for the benefit of eligible employees, former
employees and retirees in the U.S. and Canada. The plans are designed to provide employees with an
accumulation of funds for retirement on a tax-deferred basis and provide for annual discretionary
employer contributions. Amounts to be contributed are determined by the President and Chairman of the
Board of the Company under the delegation of authority from the Board, pursuant to the terms of the
Profit Sharing Plan. No contributions were made to the profit sharing plan during fiscal 2016, 2015 or
2014.
We also provide an employee savings plan which allows participants to defer income under Section
401(k) of the Internal Revenue Code of 1986.
ESOP Plan
We sponsor a leveraged ESOP that generally covers all employees with one year or more of service.
The ESOP shares initially were pledged as collateral for its debt which was originally funded by U-Haul.
As the debt is repaid, shares are released from collateral and allocated to active employees, based on the
proportion of debt service paid in the year. ESOP shares are committed to be released monthly and
ESOP compensation expense is recorded based on the current market price at the end of the month.
These shares then become outstanding for the earnings per share computations. ESOP compensation
expense was $11.6 million, $6.9 million and $6.6 million for fiscal 2016, 2015 and 2014, respectively.
Listed below is a summary of these financing arrangements as of fiscal year-end:
Outstanding as of
Interest Payments
Financing Date
March 31, 2016
2016
2015
2014
(In thousands)
June, 1991
$
46
$
10
$
48
$
53
July, 2009
991
33
31
17
February, 2016
5,000
–
–
–